Video report by ITV News Political Editor Robert Peston
Sir Michael Fallon has resigned as Defence Secretary, admitting he had "fallen below the high standards" required of the armed forces.
The 65-year-old stepped down after apologising for repeatedly placing his hand on a female journalist's knee during a dinner in 2002.
It comes as many MPs find themselves under scrutiny for alleged inappropriate behaviour at Westminster.
In his resignation letter, Sir Michael said: "In the past I have fallen below the high standards that we require of the armed forces that I have the honour to represent."
Asked on Wednesday if he expected more to come out about his behaviour, Sir Michael told the BBC: "The culture has changed over the years, what might have been acceptable 15, 10 years ago is clearly not acceptable now.
"Parliament now has to look at itself and the Prime Minister has made very clear that conduct needs to be improved and we need to protect the staff of Westminster against any particular allegations of harassment."
"I think we've all got to look back now at the past, there are always things you regret, you would have done differently," he added.
The 2002 incident involved journalist Julia Hartley-Brewer, who said she did not regard it as "anything other but mildly amusing."
On Wednesday she told ITV News that she was "completely shocked" by his resignation.
In his letter, Sir Michael said: "A number of allegations have surfaced about MPs in recent days, including some about my previous conduct.
"Many of these have been false but I accept that in the past I have fallen below the high standards that we require of the Armed Forces that I have the honour to represent.
"I have reflected on my position and I am therefore resigning as Defence Secretary."
Theresa May responded that Sir Michael had resigned in a "characteristically serious manner".
The Prime Minister thanked him for his service as Defence Secretary, saying he should take "particularly pride" in the way Britain had responded to foreign terrorism.
Sir Michael's resignation comes three years after he took up the ministerial post.
Ms Hartley-Brewer told ITV News she was "shocked" about the development and "saddened" that Sir Michael had left his post.
"The idea that touching my knee 15 years ago should be a reason for a man to lose a job at the highest level of government I find patently absurd," she said.
"I can only assume there are other allegations coming, other claims coming against him... but I cannot believe for a moment that he has decided to fall on his sword."
Reacting to the resignation, Liberal Democrat leader Sir Vince Cable told the Press Association: "I don't know what's behind it, it's obviously not as simple as that, the (Hartley-Brewer) incident was fairly minor, wasn't it? That's not a resignation so there must be more (to the resignation).
"It's unfortunate, he's obviously a very capable guy, we worked together in the coalition, it was comfortable, we came from opposite positions politically but we worked together very effectively.
"So I'm surprised and a bit saddened he's been forced out, none of us understand the underlying reasons."
Shadow home secretary Diane Abbott, said she had "no comment" on the resignation, but added it was "inevitable" that more allegations would emerge.
"I think the Government's in quite a precarious position," she said.
At Prime Minister's Questions, Mrs May announced that party leaders would meet next week to discuss how to tackle sexual abuse and harassment at Parliament.
She invited political counterparts to talks on setting up a grievance procedure after increasing allegations emerged in recent days.
"We have a duty to ensure that everyone coming here to contribute to public life is treated with respect," she told the Commons.
Labour leader Jeremy Corbyn said he was happy to take part in the process.